3 min read March 2023 — In an interview with Invest:, Dan Stoltz, president and CEO of SPIRE Credit Union, discussed the potential impact of the current economy on consumers. Stoltz also highlighted the credit union’s plans for expansion and its commitment to enhancing the lives of its clients.
How would you describe the state of the economy?
From a consumer standpoint, there’s no doubt we keep hearing the word “recession.” We believe that 2023 is going to have its ups and downs and it’s definitely going to be a year of uncertainty. It’s going to have swings and even higher interest rates than we are seeing now, which means housing and purchasing will slow down to some extent. However, savers who have not been rewarded in recent years will benefit from the higher interest rates. At SPIRE, we call this a “yellow light economy,” a cautionary economy, through 2023 that could extend into early 2024. We don’t see this as a deep concern, but the workforce is definitely going to be more challenged than it has been in recent years. For every person looking for a job, there are currently two jobs available but the Fed is tightening things up, which could lead to higher unemployment and squeeze the consumer. As one of Minnesota’s strongest auto lenders, we are starting to see some pressure on consumers as they become more leveraged. Overall, I believe 2023 is going to be a softer landing, but I don’t think it’s going to be a robust year for the economy.
SPIRE has a strong presence in the Midwest. What are your plans for expansion?
We have 22 branches and have a strategic plan to add one to two brick-and-mortar branches per year. SPIRE has to be brick and click. We are committed to the brick side of things because branches are a pillar of communities in the Midwest. People here still want to have a relationship with their financial institutions. However, we must also be committed to the click side of things. We need technology that is intuitive and simple. When I ask people where they do their banking, more and more people say their phone. So, there is a shift to technology, but people still want to come in and talk to somebody if they have a mortgage and don’t understand how it works or if they’re buying a car and want some advice. That’s why we are committed to the high-touch, high-tech approach or brick and click. We believe in that strategy and it’s definitely a focus for us.
How has SPIRE Credit Union adapted to the increasing regulatory requirements?
Regulations continue to intensify and the requirements are becoming stronger. With that, comes much more work and labor. I believe this is probably one of the benefits of having scale — you can hire the talent and have the resources to handle it. Our compliance department has doubled in the last couple of years. Compliance is necessary, but you want to have it done right so you can focus more on your customers. Fraud and regulation are two things that are continually in the spotlight for all financial institutions. Fraud is an ongoing issue and the compliance built around it is essential and requires a lot of attention and resources.
There are more requirements for financial institutions to file SARS, which are suspicious activity reports. This adds another layer of scrutiny, labor and work, even if there might not be anything wrong.
How are you helping your customers protect themselves from possible fraud and scams?
Caring for our customers is one of our core values, which is why we always provide education with examples of fraud in the marketplace through social media, our website and newsletters. We have a team here that answers phone calls and helps customers with their questions and concerns. Customers want to discuss their concerns and seek expert advice on whether something is legitimate.
Fraud is very challenging for financial institutions. It amazes me that the moment you figure out one fraud scheme, there’s always another one right around the corner. Some of the elderly frauds like romance scams have been around for a long time, yet some people still fall victim to them. It’s our obligation to take care of our vulnerable customers — that’s one of the reasons why they’re with us.
What is your outlook for the region in the near term?
Minnesota is a great place to be, especially with the Mayo Clinic being in our backyard and our medical expertise. We are blessed to be in a state with A+ healthcare and so many professional people in that area. The Twin Cities is a very diverse community, especially when it comes to businesses. We have strong retailers like Target and key manufacturers like 3M. Our diversification of business is what makes our market one of the strongest. As we get further into 2023 and 2024 and talk about recessions, it usually hits pockets and some states or regions are vulnerable. Minnesota seems to be able to get through them with less severity and moves out of them more quickly because of our collaboration and the diversification of our businesses. I’m very bullish about the Twin Cities and Minnesota.
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